reported second-quarter results Monday that easily beat expectations, and shares traded higher despite a murky outlook.
The home improvement retailer said it had net income of $938 million, or 64 cents a share, for the quarter ended Aug. 1. Those results fell from a profit of $1.01 billion, or 67 cents a share, in the year-ago period. On average, analysts expected Lowe's to notch a profit of 56 cents a share, according to Thomson Reuters.
Lowe's said that revenue rose 2.4% from a year ago to $14.51 billion, compared with the Street's average target of $14.12 billion.
"Our sales results for the quarter, while better than our forecast, reflect the realities of the continuing macro economic pressures on our industry," Chairman and CEO Robert Niblock said in a statement. "Unfortunately, weakness in bigger ticket projects continues, particularly in markets most impacted by the housing downturn."
Looking ahead, Lowe's said that same-store sales should fall 5% to 7% in the third quarter, and earnings per share should fall in a range of 27 cents to 31 cents. Analysts expect Lowe's to report a profit of 33 cents a share in the third quarter, according to Thomson Reuters.
For the full year, Lowe's forecasted that earnings per share should be in a range of $1.48 to $1.56, compared with Wall Street expecting the company to post a profit of $1.50 a share. Lowe's said that total sales are expected to increase approximately 1% for the year, which would mean that revenue would rise to $48.76 billion. Analysts are anticipating the company will see sales fall to $48.25 billion.
The macro economic factors pressuring consumers and the ongoing challenges and uncertainty of the financial markets suggest a cautious sales forecast for the balance of fiscal 2008 is prudent," Niblock said. "We remain focused on positioning the company for long-term success while managing through the near-term challenges of the current environment."
Still, Lowe's stock was adding $1.16, or 4.7%, to $25.66, and shares are now higher by 15% for the year. Rival
were climbing 1.7% to $28.